News Leadership 3.0

Growthspur: Help for revenue-challenged journalists?

In a guest post, news entrepreneur Michael McCarthy takes a look at Mark Potts’ new effort to help small local sites and blogs be financially sustainable

Michael McCarthy is editor of Seattle/LocalHealthGuide, which covers health care issues in Washington. McCarthy is a KDMC news entrepreneur fellow this year. I asked him to post occasionally on what he’s learning as he works to make his site a going concern.

By Michael McCarthy

Recently, an advertiser called me and asked if she could advertise on my site. And, frankly, I didn’t really know what to say. Since I launched 10 months ago, I’ve been concentrating on creating content, establishing credibility, and building traffic. My plan was to go to advertisers when my monthly uniques hit 20,000, which it should do this month. But right now, I don’t even have a rate card.
Pathetic, I know.
So I may well be the ideal customer for the services of a new company called Growthspur, which was launched a few weeks ago. The company aims to make small local sites and blogs financially sustainable by providing training, tools, and a network that will allow them to sell ads and develop other revenue streams.
“Ad sales is not your area of expertise,” Mark Potts, Growthspur’s CEO, said diplomatically in a phone interview, “you’re a journalist, you know how to be a journalist, and you’ve stayed away from that dirty side of the business that was ad sales.”
“But now you’ve to learn about it if you want stay alive. And you’ve got to know about ad serving, you’ve got to know about coupon technology, mobile technology, analytics.”
This, I’m afraid, is true.
Pott has put together a team with considerable experience in developing Web sites, in particular local sites.
* Potts, Growthspur’s CEO, was co-founder of Washington Post Digital and Backfence.com and is now a consultant who blogs at Recovering Journalist.
* Dave Chase is a former marketing and management executive at Microsoft including its early local effort Sidewalk.com, and now a partner at the consulting firm Altus Alliance and owner and publisher of the local news site SunValleyOnline. (Chase is also a contributor to the Knight Digital Media Center’s Online Journalism Review.)
* Tom Davidson, who advises start-ups and academic institutions on digital strategies and a former VP, Tribune Interactive, became a program consultant for the Knight Center for Specialized Journalism this summer.
* Mel Taylor is a Web ad sales consultant and trainer, who develops online revenue strategies for broadcast, print and online-only publishers.
There is a wealth of news content being produced by small local sites, Potts said. “Any good-sized city you could mention now has 20, 30, or 40 interesting blogs covering everything from sports to parenting to personal injury law” but most are struggling to survive. Many new media journalists have “have plunged in without fully realizing what it takes to do it on a sustainable basis,” Potts said. “And that’s the opportunity we’ve identified.”
Pott believes there are local advertisers who want to reach the local audiences these sites attract and he estimates that a well-run local site in a mid-sized city should be able to bring in more than $100,000 a year in revenue from advertising, e-commerce and other sources.
The challenge is to bring these advertisers and Web sites together.
Growthspur will provide the training, tools, and networks that will make that possible, Potts says.
The training will include an operational manual, a “cookbook that explains everything you need to know about monetizing a site,” Potts said, and seminars “to teach people what it is to sell ads, how you identify prospects, how you develop your rate card.”
Growthspur will also provide access to an advertiser-management platform and other tools, such as applications that allow advertisers to create and place their own ads automatically, greatly reducing the cost of ad production for the Web publisher.
Finally, Growthspur will develop metro-wide Web networks creating a one-stop shop, where advertisers can easily buy ad space across the network’s sites with one transaction.
While one local site might have relatively few visitors, a network of sites could provide the kind of exposure many advertisers would be happy to pay for, Potts said.
And what will Growthspur charge for its services? That’s yet to be determined, says Potts, but it will be based on a percentage of the Web sites’ ad sales and there’ll be no up-front charges.
“Our belief is if we can significantly increase their revenue, they’ll feel our service fee is very well justified,” says Potts.